How to Decide if Network Marketing is Right for You

Network marketing as an industry gets a bad rap. Who, in this Year Of Our Lord 2021, has not gotten that random message from a long-lost high school friend hawking a “miracle” product designed to make you thinner, prettier, or healthier? You haven’t talked to her in seriously 19 years and now here she is, rolling into your DMs to sell you a solution to a problem you didn’t even know you had.

“How thoughtful of her!” said no one ever.

But wait: there’s more! Because even if you aren’t interested in the product she’s selling, maybe you’d wanna be on her team of bossbabes? I mean, those girls are literally like sisters to her now. They have each other’s backs, and they’re killin’ it. Financial freedom is right around the corner!

Hard pass.

If only it was that simple and easy, right? You just sign up and BOOM – money starts flying into your purse.


But here’s the thing: for every saccharine, passive-aggressive network marketer I’ve had the unfortunate opportunity to endure, I know at least one passionate, heart-centered woman who is promoting products she believes in and making a good living doing it.

So if some women are scraping by and annoying everyone within a 10-mile radius and other women are generating meaningful income and creating real relationships based on love and trust, then is all this negativity toward the industry really warranted? And if you do decide to sign on with one of these companies, what do you need to look out for? How can you avoid becoming another cautionary tale?

This is where I come in.

As many of you know, I spent 10 years in commercial lending. I’ve studied the inner workings of just about every type of business you can imagine, from machine shops to radio stations. Aside from a short (and unsuccessful) Mary Kay run in college, I haven’t dabbled in network marketing or MLMs myself. It’s easy for me to be objective here.

I have a sign in my office that reads: Have a mind that is open to everything and attached to nothing, and I take that message to heart.

So let’s dive into the ugly, beautiful world of network marketing together and see what we find, okay?

How to Decide if Network Marketing Right for You Start, Grow, or Pivot

Network marketing as an industry gets a bad rap. Who, in this Year Of Our Lord 2021, has not gotten that random message from a long-lost high school friend hawking a "miracle" product designed to make you thinner, prettier, or healthier? You haven't talked to her in seriously 19 years and now here she is, rolling into your DMs to sell you a solution to a problem you didn't even know you had. But here's the thing: for every saccharine, passive-aggressive network marketer I've had the unfortunate opportunity to endure, I know at least one passionate, heart-centered woman who is promoting products she believes in and making a good living doing it. So if some women are scraping by and annoying everyone within a 10-mile radius and other women are generating meaningful income and creating real relationships based on love and trust, then is all this negativity toward the industry really warranted? And if you do decide to sign on with one of these companies, what do you need to look out for? How can you avoid becoming another cautionary tale? Listen in for my perspective on when you should—and shouldn't—jump into network marketing. SHOWNOTES: http://www.katiegrayofficial.com/podcast  FOLLOW ME: @katiegrayofficial JOIN THE COMMUNITY: Start | Grow | Pivot on Facebook — Support this podcast: https://anchor.fm/startgrowpivot/support
  1. How to Decide if Network Marketing Right for You
  2. Time to Raise Your Prices? Ask These 3 Questions First.
  3. 13. Your Body + Your Business: Empowerment for Busy Women Entrepreneurs
  4. S01 | Ep12: 5 Secrets to Better Sleep
  5. S01 | Ep11: Let Go of All or Nothing Thinking

Why do companies market this way?

Before we can even have the conversation about whether network marketing is right for you, I think it’s helpful to look at this concept from the company’s point of view.

Photo by doTERRA International, LLC on Pexels.com

Why would a company choose to market its products via a network of independent representatives instead of using paid ads, its own social media clout, or putting products in stores?

Because it’s low risk, that’s why.

These companies can control risk in a couple different ways, actually. The network marketing model offers them better control over advertising costs and less inventory risk. Let’s look closer at each of these strategies so we can understand how they benefit the company.

Better control over advertising costs

Normally, companies have to allocate a big chunk of operating expenses to marketing, advertising, and promotion. It’s not uncommon for a brand’s ad spend to be its third or fourth largest expense, usually behind rent or facilities costs and salaries which tend to take up the top spots on the operating expense side.

And those expenses don’t come with any kind of guaranteed return on investment (or ROI, in consultant-speak). This means that a company could pour thousands (or hundreds of thousands) of dollars into an ad campaign, only to have it flop. It happens all the time. And when it does, there’s no way to recoup that money. It’s just gone, having been paid out to marketing firms, publications, online media houses, social media platforms, broadcasting conglomerates, and the like.

In contrast, when a company uses a network marketing model, it generally only has to cough up the cash for marketing when product is sold.

It’s genius, really.

And, instead of hiring maybe 100 sales representatives to promote their products and work with retailers, they can hire thousands (or even tens of thousands) because they don’t have to pay these reps a salary. In fact, the company doesn’t pay a dime until—and unless—product sells.

Even better, the representatives the company signs often have to pay the manufacturer when they sign on. This payment is often a mix of joining fees, initial product purchase, and educational materials, but of course this varies widely by brand.

To be fair, some of what you pay goes toward hosting and managing the online portal representatives use to track sales and get paid, although it’s hard to know whether there might be profit baked in. And if there is profit baked in, it means the representatives themselves become a new stream of income for the company.

Less inventory risk

Virtually all product-based companies take on some amount of inventory risk—that is, risk that they’ll spend money making, packaging, shipping, and placing product that doesn’t sell.

But like all e-commerce businesses, companies that use networking marketing avoid the risk of shipping products to stores like Wal-Mart and Target only to have them collect dust on the shelf. When product grows stale in a store, this means wasted transportation cost—not to mention that some agreements allow retailers to send products back to manufacturers if they don’t sell. Ouch.

Photo by Daria Shevtsova on Pexels.com

On top of that, companies that use network marketing avoid the very real risk of reputation damage that could occur if stores mark down their inventory to get products to move.

Will *you* be successful at this?

By now, I think we’re all clear about how a network marketing model is GOLD for manufacturers. But what about the hordes of women who sign on with them?

You might not like this next part, but I have to say it. As a coach for women entrepreneurs, I’m not here to tell you what you want to hear. I’m here to tell you what you need to hear. It’s one of those “hate me now; thank me later” deals.

I’ll leave the candy-coated affirmations to your mom, your bestie, or your husband. They won’t get you where you want to go. I’m here to fight for your dreams, period. That’s what I do.

Here goes.

Check your mindset

I know, I know… another coach talking about mindset.

But hear me out: the honest, data-driven truth is that 75% of network marketers never turn a profit, and 50% actually lose money. This means that for every eight people who sign on, two of them make money; two break even; and four of them end up poorer than when they started.

Part of this phenomenon could be because network marketing gigs generally has a low or nonexistent barrier to entry, meaning anyone can sign up. This is great news when you don’t have thousands to invest in start-up costs, but it also means there is a lot of competition, because again… anyone can sign up.

And, of the 25% of people who do turn a profit, only 3% made more than $25,000.

But you probably already knew that. And yet here you are, because despite the odds, you’re still intrigued.

Here’s where mindset comes in. With such a slim percentage of network marketers making money, you’ve gotta believe in yourself 100% if you think you’re getting into that 3% club.

Photo by Andrea Piacquadio on Pexels.com

When I say you need to believe in yourself, I mean you need to take a long, hard look at the thoughts playing on repeat in your mind, because your thoughts are going to create your results.

I’ve talked about this before, but if you’re new here, here’s a quick explanation: I teach my clients something called “The Model.” I didn’t come up with it (I learned it from Brooke Castillo), but I do use it every day.

The idea behind The Model is pretty simple: what we believe to be true manifests as our reality. When something happens, we have a choice about how we view it. For example, let’s say a prospective clients balks at the price of your product. This is what we call a circumstance. It’s a thing that happened; a fact.

Where we go from here, though, is up to us. When something happens that’s outside of our control, we have thoughts about it. Thoughts are sentences in our brains that pop up in response to things that happen to us.

Thoughts, in turn, bring on feelings. And those feelings influence what we do—or don’t do (our actions). And ultimately, those actions create specific results for us.

As an example, let’s consider what might happen if you signed up with a network marketing company and sold zero products during your first 30 days:

Your Model:
1 – CIRCUMSTANCE ($0 sales in first 30 days)
2 – THOUGHT (I'll never be successful at sales)
3 – FEELING (defeated; disappointed)
4 – ACTION (shy away from marketing; pull back to avoid disappointment)
5 – RESULT (no sales)

So, your thoughts will literally make or break your network marketing career. Hence, mindset is critical. It’s probably the #1 thing I help clients do. I teach them to identify thoughts that are getting in the way of them being successful and help them re-wire their brain to choose more helpful thoughts.

Here’s an example of that same circumstance but a new, intentional thought:

Your Model:
1 – CIRCUMSTANCE ($0 sales in first 30 days)
2 – THOUGHT (I have everything I need to turn this around)
3 – FEELING (optimistic; determined)
4 – ACTION (seek help from others; study and try new methods of marketing)
5 – RESULT (attract more prospects)

What tends to work best for me—and my clients—is to start with a brain dump. Grab a pen and paper and start scribbling everything that comes to mind when you consider signing on as a network marketer.

Your brain will likely serve you some sweet thoughts at first, like:
“I love this product; it practically sells itself!”
“I’m going to make so much money!”
“If so-and-so can do it, then I can, too!”

But keep listening, because your brain is more than likely also storing some not-nice thoughts in the background.

“I’m not good at sales.”
“I might fail.”
“My friends will judge me.”

And if (when) your brain presents these shitty thoughts to you? Rejoice! You’re human! Your brain’s mission is to keep you safe from enemies foreign and domestic, and trying new things is scary and unsafe and generally to be avoided.

For the love of all that is holy, please spend as many hours untangling your wild and destructive thought patterns as you do watching TikTok. Because if you try to force the action of selling without the thoughts to back it up, you’re not going anywhere fast. This is exactly what I do with clients: show them how to sift through their thoughts to clean out the bad ones and put the good ones on repeat.

That’s all

I know you want me to tell you which companies are good and which ones are bad. A chart with sign-up fees and median income and earning potential.

Sorry. None of that here.

I’ll leave that analysis to everyone else on The Google. You don’t have to look very hard to find that information.

To me, it’s practically irrelevant.

If you want to try your hand at network marketing, you need to choose a product you truly love. One you’d feel selfish not sharing with everyone you know. (Ooh that’s a good through to practice, isn’t it?! “I would be selfish if I DIDN’T share this with everyone I know.”)

If and when you find that product or that company that lights you up, go to work on your thoughts before you spend a penny on signup fees, inventory, or anything else you need to get going with them.

Drag all of the thought-skeletons out of the closet of your brain. Expose them to the bright light of day. Which beliefs are worth keeping? Which ones are you ready to let go of?

It’s up to you. And if you want help, you know where to find me.

The Price is Right… Right?!

Last week, I laid on a narrow table, the light shining so brightly on my face that my eyes squinted instinctively, even though they were closed. Knowing I wouldn’t be able to move for the next hour (because good lashes take time), I struck up a conversation with the esthetician. 

How to Decide if Network Marketing Right for You Start, Grow, or Pivot

Network marketing as an industry gets a bad rap. Who, in this Year Of Our Lord 2021, has not gotten that random message from a long-lost high school friend hawking a "miracle" product designed to make you thinner, prettier, or healthier? You haven't talked to her in seriously 19 years and now here she is, rolling into your DMs to sell you a solution to a problem you didn't even know you had. But here's the thing: for every saccharine, passive-aggressive network marketer I've had the unfortunate opportunity to endure, I know at least one passionate, heart-centered woman who is promoting products she believes in and making a good living doing it. So if some women are scraping by and annoying everyone within a 10-mile radius and other women are generating meaningful income and creating real relationships based on love and trust, then is all this negativity toward the industry really warranted? And if you do decide to sign on with one of these companies, what do you need to look out for? How can you avoid becoming another cautionary tale? Listen in for my perspective on when you should—and shouldn't—jump into network marketing. SHOWNOTES: http://www.katiegrayofficial.com/podcast  FOLLOW ME: @katiegrayofficial JOIN THE COMMUNITY: Start | Grow | Pivot on Facebook — Support this podcast: https://anchor.fm/startgrowpivot/support

As a consultant, I’m perpetually curious about how women run their businesses. I love hearing their stories and asking questions. I love getting to know them and learning what they’re passionate about. What makes them spring out of bed in the morning, and what keeps them up at night.

Each of these conversations is a journey, and more often than not, I’m fascinated with what comes up. 

In this case, it was money. Or, more specifically, prices. 

“We raised our prices a while ago,” she told me. “And some people were not happy about it.”

Pricing in service-based businesses (think salons, spas, and the like) is wild. Unlike a brick-and-mortar shop or online store, there’s no MSRP to lean on when you’re setting your rates. There are no rules to follow, no guidelines that are guaranteed to work, nothing.

This lack of direction leads service-based entrepreneurs to rely on competitors to set their prices. But who do you think those competitors relied upon to help decide their prices? You guessed it: their competitors!

Over time, a pricing setpoint (or range of setpoints) emerges. And while I’m not suggesting you raise your rates to the point that they’re WAY outside the bounds of reality, I do encourage you to ask yourself three questions:

   #1 – What story does my price tell?

   #2 – What value(s) does my price express?

   #3 – What filter does my price provide?

Let’s dive into each of these and see whether the rates you charge tell the right story, express the value you want them to, and filter for your best clients.

Oh, and before I forget to mention it, I created a free worksheet you can download to help you with this exercise. Download it by clicking the button at the end of this post and VOILE – it will magically appear in your inbox. 😉

Question #1: What story does your price tell? 

It’s true: your price tells a story. Price is a fundamental and often overlooked form of communication. We can usually tell a lot about a service provider by the amount they charge, and prospective clients can infer a lot about you based on your prices, too.

When entrepreneurs charge relatively low prices, it usually suggests one of two things. Typically, it either means this person is inexperienced or is insecure

And hey, I’m casting ZERO judgment with either of those possibilities. It’s okay to be new at something, and it’s human to doubt your abilities sometimes. Nothing has gone wrong here.

In both cases, I would argue that charging below-market prices is bad for your client. Yes, I said it: undercharging harms you, your industry, and your client.

It can be tempting to charge less—often significantly less—than the competition if you’re inexperienced. Similarly, if you’re unsure about your skills, it logically makes sense that you’d set your rates low.

It sounds good, except humans aren’t very logical at all. Our behavior is driven primarily by emotion. And when you undercharge, you encourage your clients to indulge in scarcity-based, fear-driven behaviors. These manifest as last-minute cancellations and low retention as clients chase the next deep discount (likely from a different provider). 

If you’re inexperienced or unsure of your skills, I encourage you to focus on raising the quality of your work instead of lowering your prices. Think deeply about the experience you give your clients. How can you elevate their experience with you? How can you uplevel your customer service? 

Having said all this, I realize that pricing is an individual decision, and there are times when keeping rates low is a decision that aligns with your values or the needs of your community.

But for the entrepreneurs who do great work but attempt to compensate for being a newbie by undercharging, or for those whose limiting beliefs and mindset blocks keep them small? Consider rewriting your story. This is your business, and you’re in control.

Question #2: What value does your price express? 

First, let’s talk about the difference between price and value. Price is the dollar amount you charge. Value is what your client gets by hiring you.

And, to be clear, value is NOT a synonym for worth.

“Price is what you pay. Value is what you get.”

Warren Buffett

Please don’t confuse value with worth. I hear too many (well-intentioned) people urging service-based entrepreneurs to “charge their worth.” Except there’s a big problem with this: your worth is infinite. You couldn’t possibly charge enough to skim the surface of what you’re worth.

Value is also not a measure of what you deserveValue is simply the answer to the question: what is my service worth to the client? 

For example: How will their life improve as a result of what I do for them? What impact will hiring me have on them? What will they gain? What pitfall will they avoid by working with me?

People love to complain about the price doctors, lawyers, and accountants charge for their services. But everyone knows that the value of good medical care, sound legal advice, and accurate tax preparation is worth it.

The value concept applies to every service-based entrepreneur, by the way. It’s not limited to those who provide “essential” services. Even if you’re an esthetician, cosmetologist, coach, healer, artist, or any other “luxury” provider, your service carries immense value. 

And the amount you charge should align with that value. This approach to pricing is tricky because the value of most services is subjective and nonmonetary. Still, I think that if you’ve been considering a price increase, imagining all the ways your service is of enormous value to your clients can give you confidence.

Another way to think about the relationship between price and value is to consider your personal and professional values. What are the values that are most important to your life and work? Is it integrity? Excellence? Passion? Efficiency? Reliability? Honesty?

Get clear on your values. Does your price reflect those values? For example, if one of your values is excellence, would charging low-end rates reflect that value? I’m guessing not.

Question #3: What filter does my price provide?

Your services aren’t right for everyone, and that’s okay. Your price attracts specific clients and repels others, which works like magic if you let it.

There’s a saying in business called the Pareto Principle. It’s not an exact mathematical formula, but essentially it says that 20% of the work you put into your business will yield 80% of your results. Likewise, it’s common for 20% of your clients to take up 80% of your time, especially when you aren’t using price as an effective filter. 

The Pareto Principle showed up constantly when I managed a portfolio of business loans for a bank. As a lender, I worked with start-ups and established companies to help them fund asset purchases, manage their operating cash with lines of credit, buy real estate, and so on. Over the years, I noticed that the smallest companies often took up most of my time.

I kid you not: the multi-million dollar companies were usually the easiest to work with, while the micro-businesses gobbled up my time and energy like a colony of ants on a crumb. This is not to say I didn’t love helping small businesses—because I did enjoy it immensely—but from a financial perspective, it wasn’t ideal.

When you focus on aligning your price with the amount your ideal client is ready to pay, you know you’ve set the right filter. The clients who aren’t prepared to make the investment required to work with you—whether you’re a stylist or an attorney—are naturally filtered out by your price.

Your price certainly won’t be your only filter, but it can be one of them. Just like filtering your ideal clients by age, interest, location, gender, your price will call out to “your” people.

Bonus Question: How does my price serve my best clients?

Because money is such a loaded topic in our society, the prospect of raising prices can feel scary. As heart-centered entrepreneurs, we want to help people, have an impact, and be accessible. 

After the esthetician working her magic on my lashes shared with me how some clients reacted negatively to her recent price increase, I shared one of my favorite questions with her: “how does your new price serve your best clients? You know, the ones who value your work and respect your expertise? The ones who show up on time, refer you to their friends, and stay on schedule for fills and touch-ups?”

She was quiet for a moment, and I heard her tone change to one of curious optimism. “I’ve never thought of it that way,” she said. “But it makes so much sense.”

She shared that her salon used to get slammed every spring. Flush with cash, women whose tax refunds have hit their accounts flock to her chair for lash extensions and permanent makeup. They snatch up appointment slots, leaving “regular” clients scrambling. By summer, most of these “new” clients are gone. Some stop booking appointments, some cancel at the last minute, and some are simply no-shows.

Again (I need to make this crystal clear), I don’t think there’s anything wrong with clients who treat themselves to nice things when finances allow. It’s completely natural, and I have no place to judge that. 

What this phenomenon does, though, is illustrate the benefits of aligning your prices to your best clients. In doing so, you can be sure that your price tells the right story, is an expression of your values, and acts as one of the most potent filters you have to find and keep loyal, engaged clients.


P.S. Because I love to spoil my readers and listeners, I created a free worksheet you can download to help you with this exercise. Download it by clicking the button below.